Choose an Advisor with Deep Understanding of Technology

Gerald Blackie
CEO
Kaseya

A concern for us when we started to think about initiating a transaction process was to find the bank that would be best able to understand our technology in order to frame the company and our technology properly to potential buyers and investors.

Ability to Understand Our Technology

A concern for us when we started to think about initiating a transaction process was to find the bank that would be best able to understand our technology in order to frame the company and our technology properly to potential buyers and investors.  Our product is deeply technical and sold directly to IT managers, so finding a bank that understood the software’s value was challenging.  We wanted a team that we could rely on to position Kaseya effectively to maximize our pool of interested parties and the ultimate outcome.   The Arbor team is not only led by former technology entrepreneurs, but also includes bankers with strong operational backgrounds across multiple technology verticals. This was a key differentiator and a significant factor in our decision to hire Arbor.

Framing the Value Proposition

Arbor’s ability to frame Kaseya effectively to investors was a critical component to finding the right partner.  The Arbor team spent a significant amount of time meeting with the Kaseya team in order to understand the subtleties of how our software would fit within the different investor/acquirer businesses.   Arbor’s team quickly understood the size of the Company’s market opportunity as well as what made Kaseya’s solutions a differentiated and unique offer in the marketplace for IT management solutions.  Arbor then tailored the pitch to each of the interested companies based on synergies with Kaseya.   If we had run a traditional bank auction process to sell our business, I am confident that we would not have ended up with the same result.

Talking to the Non-Obvious Buyers

As a management team we discussed whether to run the sale process internally due to the amount of inbound interest we had from strategic acquirers.  We assumed that a strategic, rather than a financial buyer, would make the most sense for Kaseya.  During the first three months of the process, it looked like one of our competitors who had expressed interest was likely to buy us. To our collective surprise, in the end, a financial buyer was willing to pay the highest price. We learned several important things here:

  1. To question our assumptions that we knew who the likely buyer would be
  2. To recognize that the “long-tail” buyers were worth including in the process
  3. That the amount of time it took to manage a variety of parties doing diligence on the company was far beyond our expectations
  4. That it would have been impossible for the three of us to continue running the company during the M&A process if we had been managing the process ourselves

There are many things that transpired during our transaction that we couldn’t have predicted at the beginning—despite the fact that we had all previously worked at other companies that sold.  The process was very dynamic (and at times agonizing), and it helped to have an advisor guide us through all of the ups and downs.